Financial market investors are likely to be a little confused by the direction of movement for the US dollar which is becoming less clear than in previous months.
However, market analysts are still of the view that the US dollar will enter its strengthening phase with a focus on policy tightening measures by the Federal Reserve (Fed) this year.
The US dollar in Wednesday's trading was seen losing momentum after a strengthening was exhibited since the beginning of the week.
If observed on the price chart of the EUR/USD currency pair, the price has returned to move flat yesterday compared to the 100 pips decline of the price that occurred last Tuesday.
Even so, it is still early to assess the change in the price trend as the price is still moving below the Moving Average 50 (MA50) barrier level in the 1 -hour time frame.
If the price remains moving below the MA50 barrier, the decline may continue towards the support zone around 1.12500 to record a 4 -week low.
The lower decline will lead to the lowest price zone in 2021, which is the support zone of 1.12000.
On the other hand, if the price increase continues yesterday, the 1.14000 zone is seen to return to the resistance zone for the price.
A higher rise beyond the zone is likely to retest the highs reached last week around 1.14800.
